Sensex Is Trading Higher Today, While Asian Stocks Are Trading Mixed

INR is trading further stronger today

Aditi Gupta

Economist,

Bank of Baroda    

Mumbai, March 12, 2024: Global markets remained muted awaiting the crucial US inflation report, which is likely to determine the trajectory of Fed rates going forward. US CPI is expected to increase by 0.4% in Feb’24 on a MoM basis, up from 0.3% in Jan’24. Any negative surprises on the inflation front is likely to delay the start of the rate cut cycle which is widely expected to begin in Jun’24. Separately, PPI inflation in Japan rose more than expected by 0.2% (MoM) in Feb’24 (est. 0.1%), compared with a flat reading in Jan’24. This has further reinforced views that the BoJ may soon ease its ultra-dovish policy in the face of rising price pressures. In India, focus remains on CPI and IIP data due later in the day. We expect CPI to remain steady at 5.1% in Feb’24, while IIP is expected to decelerate further to 3.5% in Jan’24 from 3.8% in Dec’23.  

• Global stocks closed mixed. Investors remained cautious in the data heavy week. Some stickiness is expected to prevail in US CPI numbers. Elsewhere, investors are awaiting a likely pivot from BoJ tracking its Governor’s comments and ahead of spring wage negotiations. Nikkei moderated, while Hang Seng and Shanghai Comp inched up. Sensex edged down, led by losses in banking stocks. It is trading higher today, while Asian stocks are trading mixed.
• Global currencies ended mixed. After falling for 6-straight sessions, DXY recouped some of its losses ahead of US CPI report due later today. GBP and EUR were lower. On the other hand, JPY strengthened further on expectations of a pivot by BoJ. INR traded near a 6-month high supported by buoyant FPI inflows. It is trading further stronger today, in line with other Asian currencies.
• Except UK (stable) and India (lower), global yields closed higher. Germany’s 10Y yield rose the most ahead of ECB Council member’s speech. US 10Y yield also inched up by 2bps as New York Fed’s 1-year inflation expectations inched up. India’s 10Y yield fell by 2bps, supported by buoyant debt inflows. It is  trading at the same level today.

(The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.)